Retirement can be a scary prospect. You’re planning to give up a steady income in favor of providing one for yourself for the rest of your life. Yeah, that’ a big step, and certainly not one that should be taken lightly. For some people, though, they’re ready to dive in sooner rather than later.

While there is no official start date of retirement, for this article let’s think of it as between 62 and 65. Retiring at age 62 is something that is pretty common for many Americans. In fact, the average age of retirement for men in America was 64 in 2013 while for women the average age was 62.

You’re not common, though. You’re special. And as such, you want to retire early. In fact, you want to retire in your 50s. Good news, it just might be possible if you’re able to get RIDD of your paycheck.

Rent

If you own rental properties, you should be receiving monthly rent check from your tenant. You can use this monthly cash flow to serve as part of your self-guided “paycheck.” It’s important to note that cash flow is the important part of this equation, though, so the rental property will serve you best if you own it outright.

Interest, Dividendsand Distributions

You receive interest from bonds you’ve invested in, dividends from stocks, and distributions from a variety of investments that don’t neatly fit into the stock or bond category. Depending on how your portfolio is weighted, an income producing portfolio should be able to produce an annual “cash flow” somewhere in the 4 to 5 percent range.

We refer to a portfolio balance focused on cash flow as income investing. Generally, retirees who fit more into the traditional timeline of 62 and up can plan on withdrawing 5% every year, but if you plan to retire in your 50s, it’s better to expect a 4% withdrawal rate per year.

Let’s say that you have $1,000,000 invested. Using income investing, if you decided to retire in your 50s you should be able to withdraw $40,000 a year. If you combine that amount with any monthly rental income, you should be setting yourself up for a comfortable monthly retirement paycheck.

There are several other ways to supplement your plan to get RIDD of your current 9 to 5 job.

Part-time work

Just because you’re ready to stop working 40 hours a week doesn’t mean you have to stop working entirely. Learn if you can work part-time or as a consultant for your current company. If you’re ready to branch out and try something totally new, this is a great opportunity to explore.

Pay off your mortgage

Your mortgage payment probably makes a significant impact on your monthly budget. If you’re already close to paying it off, you might consider writing one last check to the bank to lower your monthly expenses. Generally speaking, we believe that if you can pay off your mortgage using no more than 1/3 of your nonretirement savings, you should consider paying off the house today. Chat with one of our financial advisors today to learn if this would be a good move for your early retirement.

Healthcare

One important piece of your early retirement planning puzzle is healthcare. If you’re not working anymore, you’ll need to find a private policy to bridge the gap until you are eligible for Medicare at age 65. It’s important to include this expense when determining your retirement budget.

Clearly it’s not easy to retire early. There is plenty of planning and preparation involved to get into a position where you can comfortably retire early. However, if you’re disciplined and able to plan well in advance, there is a clear path to how you can get RIDD of your full-time employment status.

Click below to find out how Wela can get you on the track to retirement.